“I just got the call [Tuesday] saying everyone was being let go,” the on-set source said. “We were supposed to start this weekend, but obviously they fired everyone today. They don’t know yet what they are doing with the footage that was already shot,” the source added.

Ledger was on a break from filming Terry Gilliam’s $30 million indie film when he died Tuesday. Shooting had begun in London last December. He was last photographed on set Jan. 19.

Variety says that blue-screen work was due to start next week in Vancouver and continue until early March.

The producers have yet to issue any statement about how or whether they plan to proceed without Ledger.

Ledger was the biggest name in an ensemble cast including Christopher Plummer, Lily Cole and Tom Waits. It’s the story of an ancient travelling show which arrives in modern London with a magical mirror that can transport its audience into fantastical realms of the imagination.

Plummer plays the impresario Doctor Parnassus, and Ledger took the role of a mysterious outsider who joins the troupe on a quest through parallel worlds to save the doctor’s daughter (Cole) from the clutches of the devil (Waits).

The movie is produced by Samuel Hadida, Bill Vince and Amy Gilliam, and largely financed through Hadida’s Paris-based Davis Film.

Ledger’s involvement in the project was a key factor in raising the finance. He had a strong relationship with Gilliam from their last pic together, The Brothers Grimm.

In November 2000, Gilliam was forced to abandon his $32 million indie project The Man Who Killed Don Quixote after just a week of shooting, when his star Jean Rochefort was too ill to continue.

Ledger’s death also came as he was working on what would have been his feature directing debut, an adaptation of the Walter Tevis novel “The Queen’s Gambit,” with British writer/producer Allan Scott.

The leading role of a young female chess prodigy had been offered to Oscar nominee Ellen Page. Ledger, himself a highly rated chess player, was due to play a supporting role.